Summary of Key Formulas

Applications of Algebra
Portion
Rate = (1-1)
Base
Sum of ( Weighting factor × Value )
Weighted average =
Sum of weighting factors
V f −Vi
c = × 100% (2-1)
Vi
Income
Income yield = × 100%
Vi
Capital gain
Capital gain yield = × 100% (2-2)
Vi
Income + Capital gain
Rate of total return = × 100%
Vi
V f  = V i  1c 1   1c 2   1c 3 ⋯  1c n  (2-3)

Mathematics of Merchandising Cost-Volume-Profit

Analysis
N = L(1 – d) (4-1) CM = S – VC
(5-1)
N = L (1 − d 1 ) (1 − d 2 ) (1 − d 3 )
CM
(4-2) CR = ×100%
S
S=C+M (4-3) NI = (CM)X – FC (5-2)
M=E+P (4-4) TR = (S)X
S=C+E+P (4-5) TC = (VC)X + FC (5-3)
M
Gross profit margin = ×100% NI = (S – VC)X - FC
S
M
Rate of markup = ×100%
C
D
Rate of markdown = ×100%
S

Simple Interest
I = Prt (6-1)
S = P(1+rt) (6-2)
Compound Interest
Single Payment:
j
i= (8-1) n = m × (Number of years in the term) (8-3)
m
FV = PV (1 + i ) n PV = FV ( 1 +i )
−n
and (8-2)

FV = PV (1 + i1 ) (1 + i2 ) (1 + i3 ) ⋯ (1 + in ) (8-4)
1
FV  FV  n
(9-1)
i = n −1 =   −1
PV  PV 
ln ( FV PV )
n = (9-2)
ln (1 + i )
m
f =  1i   −1 (9-3)

i 2 = (1 + i1 ) m 1 /m 2 −1 (9-4)

Annuities:
(1 + i ) n −1  1 −(1 +i ) −n 
FV =PMT   (10-1) PV =PMT  

 i 
 
 i 

(10-2)
 i × FV   i ×PV 
ln 1 +  ln 1− 
 PMT  (10-1n)  PMT 
n = n=−
ln (1 + i ) ln (1 +i )
(10-2n)
Number of compoundin gs per year
i 2 = (1 + i ) c − 1 (9-4c) c =
Number of payments per year
(10-3)
PMT
PV = (12-1)
i
(1 + i ) n −1 
FV ( due ) =PMT   ×(1 +i ) (13-1)

 i 

1 −(1 +i )−n 
PV ( due ) =PMT  ×(1 +i ) (13-2)

 i 

 i × FV (due)   i ×PV (due) 
ln 1 +  ln 1− 
 PMT (1 + i )  (13-1n)  PMT (1 +i ) 
n= n=−
ln (1 + i ) ln (1 +i )
(13-2n)
( 1 + i ) n − ( 1 + g ) n  1 − ( 1 + g ) n ( 1 + i ) −n 
FV = PMT   (12-2) PV = PMT   (12-3)
 i−g   i −g 
 

Bonds:
 1 − (1+ i ) −n 
Bond price = b( FV )   + FV (1 + i )
−n
(15-1)

 i 
